The Proceeds of Crime Act 2002 (Cth) is contentious law. It is designed to prevent people from benefiting from the proceeds of criminal offences. The Act allows authorities to seize, freeze, restrain and forfeit assets that have a connection to illegal activity. Even assets purchased with lawful funds can be considered proceeds of crime.
Proceeds of crime could include assets acquired through crime, assets used in the commission of an offence, and unexplained wealth. The connection need not be substantial.
“…the principle of legality favours a construction of the Proceeds of Crime Act — if one is available — which avoids or minimises its encroachment upon fundamental property rights.”Cini v Commissioner of the AFP  VSCA 227; 312 FLR 432 at 
Proceeds of Crime litigation
Litigation under the Proceeds of Crime Act 2002 (Cth) is civil. It provides for very limited judicial discretion and some limited protections. Significantly:
- forfeiture can occur without proving a criminal offence beyond reasonable doubt;
- in many instances the onus of proof is reversed;
- there is no right to silence or privilege against self-incrimination; and
- frequently, legal privilege is abrogated.
Since 2012 most matters under the Proceeds of Crime Act 2002 have not only been investigated by the Australian Federal Police; they have also been litigated by in-house lawyers employed by the Commissioner of the AFP. I was an inaugural member of the AFP’s management team as Deputy Counsel for WA, SA and the NT. The AFP is pursuing litigation more aggressively than the Commonwealth DPP used to.
Seizure, Freezing, and Restraint of Property
Seizure of Property involves the federal police physically taking possession of the property to secure it. Property commonly seized includes valuable motor vehicles and watches.
Bank accounts can be frozen by a Magistrate for 3 business days. This is done infrequently.
Any type of property can be restrained by a Judge of a District, County, or Supreme Court. Restrained simply means frozen. Restrained property stays restrained until the Court orders that it be released or forfeited to the Commonwealth of Australia. Whilst property is restrained it cannot be sold, rented, mortgaged, or otherwise dealt with. Subject to the terms of the Court’s order, the owner of restrained property may be permitted to continue to use it. In the case of a house this may include living in it. A restraining order does not affect existing legal interests.
How to release property from a restraining order
Property can be released from restraint in several ways. These include:
- Revocation. This is a cancellation of the Restraining Order on the basis that it never should have been made. The onus is on the property owner. This is exceptionally difficult to achieve.
- Exclusion from Restraining Order. The owner of the property bears the onus. The owner must prove on the balance of probabilities that the property does not have a connection to crime.
- Defending the Forfeiture Application. In some cases the owner will not need to make a positive application. Instead they can oppose the making of a Forfeiture Order. The Commissioner of the AFP bears the onus of proving, on the balance of probabilities, a relevant serious criminal offence. If property is restrained under section 19 this will not be a viable option.
Proceeds of Crime Final Orders
There are six types of final orders that can be made under the Proceeds of Crime Act 2002.
If a person is convicted of an indictable Commonwealth offence, any property derived from the offence must be forfeited. Any property used in the commission of the offence may be forfeited. Post-conviction litigation is most likely to be focused on whether a third party interest is liable to forfeiture.
When a person is convicted of a serious offence (as defined) restrained property is forfeited after 6 months unless the person successfully applies to have the property excluded. In order to avoid forfeiture the owner must establish that the property was not derived from or used in the commission of any offence.
Unexplained wealth (UEW) is a relatively untested stream of the Act. The first matter was commenced (in WA) in 2017 even though the powers were introduced in 2010. Unexplained wealth under any confiscations legislation is inherently complex. But the complexity is even more pronounced under the POCA. Unlike the State Parliaments, the Commonwealth Parliament does not enjoy plenary powers to make whatever laws it chooses (subject to express constitutional limitations). The UEW provisions of the POCA must therefore be tied back to a specific federal constitutional head of power. At the factual level UEW litigation usually relies heavily on forensic accounting evidence.
Non-conviction based forfeiture
The concept is broadly the same as conviction based forfeiture, with a few important twists. First, the AFP must prove (on the balance of probabilities) that a relevant offence was committed. This can involve running a quasi-criminal trial. Second, property can only be forfeited on the basis that it was used in the commission of an offence if the offence is a ‘serious offence’ (defined in s 338 to include a range of Commonwealth drug, money laundering, fraud and other offences). Third, property can be forfeited on the basis that it is derived from the commission of any Commonwealth indictable offence, a foreign offence and certain state offences.
Pecuniary penalty order
Typically used for fraud offences (but available more generally) these orders quantify the benefit or profit that a person has derived from unlawful activity. The person is then required to pay that amount to the Commonwealth, failing which restrained property owned by the person may be sold to satisfy the debt. These orders are available on both a conviction or non-conviction basis.
These provisions have rarely been used. Most famously they were used against Schapelle Corby. They were also attempted to be used against David Hicks, but that litigation came to an abrupt halt when the authorities realised they could not rely on his conviction before the United States’ Military Commission. The intention of the provision is to prevent people from profiting from crime by writing a book about it or being paid to give media interviews.
Proceeds of Crime Act Process
The below is a summary of typical processes. Not all of these steps are undertaken in all matters, and other processes may occur in others. While there is some overlap, unexplained wealth matters have their own unique processes. Read more about unexplained wealth.
For advice in a specific matter, please contact me directly.
Notices to Financial Institutions
An AFP Commander can require a bank (or other financial institution) to provide financial information including statements and account balances.
A Magistrate can require any business (real estate agent/settlement agent/lawyer) to provide information about property.
A Judge may order a bank to provide the AFP with ongoing, real-time information about transactions on an account. This allows the AFP to work out when to apply to freeze or restrain an account.
(Interim) Freezing Order
A Magistrate can freeze an account, but not other property, for 3 business days upon an application from a federal police officer.
Restraining Orders can be made over any type of property by the District, County or Supreme Courts. There is no expiry and the order will remain in place until the litigation is concluded. The order is often applied for ex parte (without notice).
Within 28 days of service of the Restraining Order the owner of the property can apply to the Court to revoke (immediately cancel) the Restraining Order. The threshold to revoke is incredibly high.
Sections 29-31, and 73
The owner of property can, and in the case of a section 19 restraining order must, apply for an order excluding the property from the restraining order. To succeed, the owner must prove that the property is not proceeds or an instrument of crime.
On the application of the Commissioner of the AFP the Court may order a compulsory examination of any person in relation to the affairs of a suspect, property owner and/or the spouse of the suspect or property owner. There is no privilege against self-incrimination. Read more about compulsory examinations.
The AFP can apply to have property permanently forfeited to the Commonwealth. To do so, the Commissioner must prove on a balance of probabilities that the property is proceeds or an instrument of crime.
Compensation, Exclusion and Hardship
Sections 73 and 77
The owner of property forfeited can apply for various orders to reduce the extent of forfeiture. These applications are likely to be heard at the same time as the forfeiture application.
Pecuniary Penalty Orders
Where the AFP allege a person has benefited from fraud or other offences, they can apply for an order that the person pay a sum to the Commonwealth reflecting that benefit. The AFP can sell restrained assets even if they are not tainted.
Frequently asked questions
Can proceeds of crime action be taken if the client hasn’t been charged?
Yes, this is the expressed purpose of the Act. See in particular sections 18, 19, 47, and 49. Contrast these with sections 17 and 48 which are conviction based.
Are Proceeds of Crime matters civil or criminal?
Per section 315 proceedings are civil, not criminal. The onus is often reversed.
I had nothing to do with any crime, can my property still be confiscated?
Yes, in some circumstances. Even property that has a fairly remote connection can be forfeited even though the owner may be blameless. There are some limited protections for innocent third parties. I argued the lead case in this area.
Can property seized under the Proceeds of Crime Act be released for living expenses?
Yes. Section 24 of the POCA provides that an owner of property that is restrained may apply to have it or part of it released in order to pay living and business expenses of that person, as well as debts owed by that person and the living expenses of their dependents.
Can property restrained under the Proceeds of Crime Act be released for legal expenses?
No. However, there may be other options available. Please contact me to discuss.
Can Proceeds of Crime authorities make my client answer questions?
Yes. Section 180 permits the Court to order an examination of a person’s “affairs”. This is defined broadly to include unlawful activity by the person. Please review my further information about compulsory examinations.
Can I be the solicitor on record for the Proceeds of Crime matter and any related criminal charges?
You can. However, as the onus of proof is different in the two proceedings, you may want to consider whether it is in your client’s best interests to do so. Proceeds of Crime lawyers often have to ask questions of the client. The answers to these questions may limit the available defences to the criminal charges.
Do I need to brief a proceeds of crime barrister?
No. However there may be cost savings for the client if the barrister you choose specialises in proceeds of crime and does not need to do fundamental research. Extensive experience in Proceeds of Crime means you can be confident that all appropriate options to protect your clients’ property will be explored.
What happens to property seized under the Proceeds of Crime Act?
In some cases the owner can continue to manage it whilst the litigation is on foot. In other cases the Court will order the Official Trustee to control the property. Once the property is forfeited it vests in the Commonwealth.
- Compulsory examinations
- Unexplained Wealth
- Proceeds of Crime and Confiscations: Practical Steps for Solicitors (PDF)
- Proceeds of Crime blog posts
- Links to relevant Court of Appeal and High Court decisions (external link)
- My submission to the Senate Legal and Constitutional Affairs Legislation Committee regarding the Proceeds of Crime Act
The Proceeds of Crime Act 2002 was enacted in response to an ALRC report entitled Confiscation that Counts. The report is a useful aid to understanding the Act. Other extrinsic material can be found on the Parliamentary home page for the Proceeds of Crime Bill 2002.
When the Proceeds of Crime Act 2002 was enacted the Parliament mandated that an independent review be conducted 3 years thereafter. The 2006 review that followed made many recommendations, most of which were ultimately enacted in 2010. The review is available at the web archive of the National Library.
Proceeds of Crime information in other languages:
Proceeds of Crime barrister
Is it necessary to brief a specialist proceeds of crime barrister?
The Proceeds of Crime Act has been extensively amended. It has, particularly since 2012, been the subject of appeal on a number of occasions. There are undoubtedly many more statutory construction questions still to be resolved.
While it is not necessary to brief a proceeds of crime barrister, you and your client may find it beneficial to have a specialist barrister set the strategy, carry out negotiations and appear in court. There are a number of aspects of the Proceeds of Crime regime that are different from other civil and criminal procedures.
A proceeds of crime barrister is likely to be up to date on all developments in this area, have well-prepared precedents and be able to quickly get to the heart of your client’s matter.
About the Author Edward Greaves
I have been recognised as an expert barrister in Proceeds of Crime and related areas. I practise from Francis Burt Chambers in Perth, Western Australia.
I take instructions from solicitors nationally. I have been briefed on proceeds of crime matters in New South Wales, Queensland, Victoria, South Australia and Western Australia. I have appeared in multiple courts including repeated appearances as counsel as well as before the full bench of the High Court.
For specialist advice from a Proceeds of Crime barrister please contact me. I am happy to discuss how I may assist your client.